October 31, 2019

When to Do Scenario Planning – and When Not to

Peter Kennedy
Managing Principal

It may seem a bit odd for a scenario-consulting company to say this, but scenario or alternative futures planning is not the right remedy for all organizations worrying about the future.  In fact, while FSG believes that are times when scenario planning is very appropriate – even urgent – there are times when it’s not right at all, even potentially harmful. 

When we talk about scenario planning in this context, we’re not talking about simple what-if exercises, which are never out of season, and are in fact quite useful for stress-testing business plans.  What we are talking about here is in-depth and rigorous alternative futures planning that goes beyond five and sometimes beyond 10 or more years.  Done right, these processes demand executive attention and outside consulting support – and perhaps most difficult, significant staff time.  

So, here is a list of situations when an investment in scenario planning may not be prudent. 

  • Companies in acute distress.  It is hard for firms to focus on the future when their present situation is under existential threat.  Management’s time is better focused on steadying the ship, optimizing existing resources, and keeping employees upbeat and motivated. That’s a big lift in itself.  The longer-term future can wait while the near-term future gets straightened out. 
  • Leadership not actively supportive. FSG scenario consultants have observed many situations when scenario planning engagements were initiated with passive or merely lukewarm senior leadership support.  Perhaps leadership has been pressured (by the board or other influential stakeholders) to apply scenarios to “scan the horizon” for what’s coming – climate change, technology disruption, non-traditional competition, whatever – but don’t have a plan for acting on what’s learned. That’s a prescription not so much for failure as disappointment: All that hard work and no path or mandate for execution. But it also invites resentment among project teams and resistance to joining future strategy initiatives. 
  • Management already knows what they want to do. Sometimes management brings in a consultant because they see the process as helping them drive toward a pre-ordained conclusion. But a good scenario-planning process must begin without preconceptions, so it can unearth previously unsuspected, externally-driven, plausible future eventualities. Bringing in seasoned scenario planners (i.e., not shills) and expecting them to merely confirm your pre-existing vision is management malpractice. 
  • Limited personnel to drive the process. In recent years, this has become the biggest obstacle to successful scenario planning: too few staff members available for the scenario project. It can force overreliance on consultants to provide process, content and direction. These responsibilities need to be thoughtfully shared. Freeing up a diverse group of people, ideally a mix of mid- and junior-level staff – means unburdening them from some share of their daily routines so they can devote time to the scenario exercise. It’s hard; all organizations struggle with this.  But it’s something that leaders committed to a meaningful scenario experience must make happen.  
  • Unrealistic expectations on delivery of results. Scenario exercises are different from conventional strategy processes in which the future is something of a fixed state. In scenario planning, the future – actually a set of futures – must be created.  This requires research, analysis, reflection and close collaboration between internal project staff and consultants. At least two months must be allowed for just the scenario development stage – and more if extensive interviews are to be undertaken. Workshops, synthesis of output and document development typically consume another two months, or more. So, while there are most definitely ways to expedite the process (e.g., FSG can jumpstart scenario development with pre-existing scenario foundations) and trim tasks at the front end, there’s really such thing as “quick and dirty” scenario planning. But a process that delivers robust insights about the future is always worth waiting for. 

Full disclosure:  As if it’s not terribly obvious already, FSG’s core business is scenario and futures planning.  We do believe it is a powerful and enlightening way to grapple with the complex challenges the future presents.  But we also recognize that it’s not for all organizations all the time. Scenario planning is not the only way to peer over the horizon or manage future uncertainty. Depending on situation specifics, there are other simpler and less time-consuming processes that can help inform important decisions with the benefit of futures insights.  We can help with them, too.

Thoughts?